Working Paper No. 610

Demand Uncertainty, Mismatch and (Un)Employment

Published: November 28, 2003Pages: 19Keywords: Skill Mismatch; Price Uncertainty; Unemployment EquilibriumJEL-codes: I28; J41; L13

Demand Uncertainty, Mismatch and (Un)Employment Mohamed Jellal, Jacques-Françis Thisse and Yves Zenou


A finite number of heterogeneous firms facing demand-induced price fluctuations imperfectly compete for heterogeneous workers. Because firms must commit to wages and employment before the realization of product price, they exhibit a risk-averse behavior. It is then shown that unemployment may arise in equilibrium because of the combination of uncertainty on product price and mismatch between workers' skills and firms' job requirements.

 

Elgar Companion to

Social Capital and Health

Martin Ljunge okt 2018.jpg

Martin Ljunge, IFN, is the author of a chapter, "Trust promotes health: addressing reverse causality by studying children of immigrants", in a new book edited by Sherman Folland and Eric Nauenberg. The cutting edge of research is presented, covering the ever-expanding social capital field.

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